Tribune bonds hold up

Well, relatively speaking. Despite what's been happening in the credit markets, Tribune Co. doesn't appear to face any imminent problems in its schedule to pare down debt. Actually, it’s in better shape than the Star Tribune in Minneapolis, which stopped making debt payments. The company is pretty much covered for the rest of the year, with the next big payment coming due in June. Between now and then, cash flow will continue to be the watchword - that is, Tribune's ability to keep generating money to help pay off that debt. The cash flow numbers have been terrible – the LAT in particular – largely the result of so much lost advertising revenue (especially classified ad revenue). One other potential problem: rising interest rates. From the Chicago Tribune:

Rising interest rates could cost the company nearly $100 million more annually, according to analysts, putting more pressure on the company to sell the Chicago Cubs by the end of 2008 or early next year. Debt analysts and investors are counting on Tribune Co. to execute that deal in that time frame because of a looming debt payment of nearly $600 million in June, as well as tighter lending requirements in 2009. Some predict a package of the Cubs, Wrigley Field and related broadcast properties could fetch more than $1 billion. Some of the proceeds are expected to be used to pay off the June loan. A Tribune Co. spokesman declined to comment. Without a timely sale of the Cubs, Tribune Co. would have to consider selling other assets to meet the conditions of its loans. While newspaper properties are declining in value, Tribune Co., unlike some other media companies, has other attractive assets, including broadcast stations, real estate and a stake in the Food Network cable channel.